That may seem like a normal industry acquisition, but there's
something more interesting going on here. Upmarket and mid-market
gyms in the UK such as LA Fitness, which is not related to the
American chain of the same name, are being destroyed by budget
rivals.

In the same way budget airlines revolutionised air travel 20
years ago, budget gyms have changed the fitness market in the UK
since the recession.

New players like Pure, PayasUgym, and TheGym have flipped the
traditional business model on its head, forcing the incumbent
players to fight their corner.

UK operators such as Fitness First, David Lloyd, LA Fitness, and
Virgin Active typically lock you in to a long-term contract at a
pretty high monthly rate — about £40 ($61) as a basic — but
promise premium service in return. There are pools and saunas, as
well as top-of-the-line equipment and plenty of TV screens.

On the other hand the new breed of gym lets you cancel your
contract at any time and offers membership typically costing
about £20 ($30) a month. The gyms keep small staffs and include
only basic equipment.

Full disclosure, I'm a member of the Pure Gym near my house. It's
in a warehouse that looks like an air hanger and is about as
no-frills as you could get — I feel lucky there's a shower. But
it's just so cheap. I would never have signed up to a deal
amounting to £40 ($61) a month, but at this price point I think
why not.

Pure Gym and its rivals are having huge success pitching to
consumers like me whose needs had been unmet. Most started life
around the time of the 2008 recession, when money was tight. The
first Pure Gym opened in 2009, but the brand is already the UK's
biggest gym operator, with 130 outlets across the country.

By contrast LA Fitness, which has been around since 1990, has
only 43 clubs and at its height had about 80 gyms. Pure Gym says
it plans to open another 30 gyms next year — nearly reaching LA
Fitness' entire footprint in just one year.

These budget gyms are cheap to set up and cheap to run. Pure's
founder, Peter Roberts,
told The Telegraph in January that each gym typically
employed just two full-time staff members, with self-employed
personal trainers also on site. Most of the administrative work
is done online and automated.

The popularity of budget gyms shows no signs of slowing. Pure Gym
CEO Humphrey Cobbold said Friday in a statement: "Overall demand
for affordable, high-quality, and no-contract fitness centres is
continuing to grow, served by a range of providers in a highly
competitive marketplace."

LA Fitness and gyms like it, meanwhile, look to be on the way
out. The company was valued at £90.3 million ($138.22 million) in
a private-equity deal in 2005, but last year its lenders took
control of the loss-making chain and had to pull off a major
restructure. At the time it blamed competition from the likes of
Pure Gym. Terms of Friday's sale were not disclosed.

Pure is set to turn all LA Fitness branches into its own brand
budget offering as part of plans to expand in London and the
South East. That makes one upmarket gym chain that has fallen at
the sword of its budget rival. Others could follow.